As offices empty out in Downtown Los Angeles, renters have filled up Downtown apartments and put upward pressure on rents.
Multifamily occupancy rose to 90.8 percent in the first quarter ending in March, from 90.1 percent a year earlier and up from 84.7 percent in 2019, Bisnow reported, citing figures from the DTLA Alliance.
Average rents hit $2,838, a smidge under the $2,841 during the same period in 2023, the highest average rent over the last five years.
The Beaudry, a 64-story Brookfield property that opened in 2023, is asking between $2,500 and $3,200 a month for studios, and up to 11,000 a month for a three-bedroom flat. The 785-unit tower is 90 percent occupied — with a 34 percent jump in leases this month, from April.
Developers have just opened two apartment buildings with more than 500 combined units in Downtown.
Last quarter, Portland-based NBP Capital completed a 280-unit market-rate complex at 200 Mesnager Street in Chinatown, while Seattle-based Housing Diversity opened a 230-unit affordable complex at 1411 South Flower Street in South Park.
“The numbers have reinforced that the appeal of Downtown living continues to be strong and that the market [in LA] continues to be strong,” Nick Griffin, executive vice president for the DTLA Alliance, told Bisnow.
While the neighborhood population of 90,000 residents has remained the same since 2019, there’s been a steep drop in development of new units since, according to the coalition of more than 2,000 property owners in Downtown
The higher vacancy before the pandemic can be partially blamed on a sizable construction pipeline. In the first quarter of 2019, 2,276 new apartments became available for rent, compared to 507 last quarter.
Strong occupancy in Downtown and relatively high average rents suggest a solid market, despite a shift to remote work that has left 31 percent of its offices vacant, according to Cushman & Wakefield.
Downtown L.A. has also been beset by a lack of foot traffic that has impacted curbside businesses and added a perception of unsafe streets.
Despite its challenges, the neighborhood is expected to add more residents. It’s also zoned to hold 20 percent of the city’s new residential development on 1 percent of its land over the next 15 years, according to Bisnow.
“The neighborhood part has felt really, really consistent, and I think the occupancy numbers really show that part’s been pretty steady, but also from a lived experience on the ground, like, that’s what you see,” Cassy Horton, co-founder and board member of the Downtown Los Angeles Residents Association, told Bisnow.
Public safety is residents’ top concern, according to a recent survey. Some 67 percent of respondents said they love living in DTLA, but 44 percent said they think DTLA is moving in the right direction.
The survey of 1,200 residents, conducted by the DTLA Alliance in March, found that 35 percent planned to live in Downtown for six years or more, while 20 percent had spent between 11 and 19 years living there.
Griffin told the publication, “Not only are people not leaving, they are more committed than ever.”
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